Inflation rate likely accelerated to 3.6 percent in March from 3.3 percent in February, as the weak peso caused higher food, power and fuel prices, the Finance Department said in a report Tuesday.
The Finance Department said in an economic bulletin that inflation rate, or the movement in consumer prices, probably settled at 3.6 percent in March, faster than 3.3-percent in February and 1.1 percent in March last year.
The agency’s inflation forecast was within Bangko Sentral’s estimate of 3 percent to 3.8 percent for March.
Finance Undersecretary and chief economist Gil Beltran said the acceleration of inflation was also due to “base effects,” adding that global petroleum prices started normalizing from low levels last year.
“The BSP has lowered its inflation forecast for the whole year 2017 [to 3.4 percent from 3.5 percent in February] due to lower actual inflation than earlier forecast,” Beltran said in a report to Finance Secretary Carlos Dominguez III.
The Philippine Statistics Authority is set to release the official March inflation report today.
The depreciation of the peso to a 10-year low in the first quarter was blamed for the higher prices of several imported products, such as fuel, automotive, consumer goods and food. The peso declined 0.1 percent Tuesday to settle at 50.175 against the US dollar, still near the 10-year low of 50.395 registered on March 6.
The Finance Department said prices of food and non-alcoholic drinks likely rose 4.5 percent in March, while the cost of alcoholic drinks and tobacco increased 6.5 percent.
Prices of housing, utilities and fuels likely increased 4.1 percent in March, while those of clothing and footwear inflation went up 2.9 percent.
Manila Electric Co.’s power rate slightly increased to P10 per kilowatt-hour in March from P9.3 per kWh in February and P8.9 percent a year ago.
Meralco’s generation rate per kWh also increased to P4.9 in March from P4.3 in the previous month and P4 in the same month in 2016.
Meanwhile, the average price of diesel in Metro Manila among the “big three” oil companies slightly dropped to P31.1 per liter from P31.3 in the previous month, but higher than P22.5 in the same month in 2016.
Average price of gasoline also decreased to P46 per liter from P47.7 a liter in February, but much higher than P37.6 a liter in the same month last year.
Bangko Sentral’s Monetary Board in its last meeting on March 23 kept the benchmark interest rates steady at 3 percent for overnight borrowing, 3.5 percent for overnight lending and 2.5 percent for special deposit account.
Inflation in the first two months of 2017 averaged 3 percent, the midpoint of the target range of 2 percent to 4 percent.
